New Central Bank Act Essay

1554 Words Oct 19th, 2013 7 Pages
The New Central Bank Act (RA 7653)
CHAPTER V
FUNCTIONS AS BANKER AND FINANCIAL ADVISOR OF THE GOVERNMENT
ARTICLE II - THE MARKETING AND STABILIZATION OF SECURITIES FOR THE ACCOUNT OF THE GOVERNMENT
A. THE ISSUE AND PLACING OF GOVERNMENT SECURITIES
SECTION 117. Issue of Government Obligations. — The issue of securities representing obligations of the Government, its political subdivisions or instrumentalities, may be made through the Bangko Sentral, which may act as agent of, and for the account of, the Government or its respective subdivisions or instrumentality, as the case may be: Provided, however, That the Bangko Sentral shall not guarantee the placement of said securities, and shall not subscribe to their issue except to replace
…show more content…
Such activities detracted from the Central Bank’s primary objective of maintaining monetary and price stability. Republic Act No. 7563 provided for the gradual phase-out of the fiscal agency functions of the Bangko Sentral, and transfer of the same to the Department of Finance, consistent with the mandate of the Constitution to establish an independent and effective monetary authority. * The transfer of the fiscal agency functions from the Bangko Sentral to the Department of Finance was initially implemented through a Memorandum of Agreement dated June 30, 1995. * The transfer of fiscal agency functions of the Bangko Sentral to the Department of Finance was to focus the Bangko Sentral to on its primary objective of monetary policy – to maintain the monetary and price stability.
117.3 Purchases and Sales of Government Securities Despite the phase-out of the function involving the issue and sale of government securities, the Bangko Sentral may still purchase and sell securities issued by the Government, its political subdivisions or instrumentalities, of undertaken not as an agent of the Government but as a price stabilization measure or as part of its open market operations. In that case, the Bangko Sentral may only buy and sell government securities for its own account.
Open Market Operations
An open market operation is an activity by a

Related Documents